Oil prices rise on supply worries

In this Aug. 16, 2012, file photo, gas prices are advertised at a Sunoco gas station and market in Lapeer, Michigan. Oil prices rose Tuesday, Aug. 21, 2012, on worries over possible tight supplies caused by tensions over Iran, analysts said. AP PHOTO/MIKE HOUSEHOLDER

LONDON—Oil prices rose Tuesday on worries over possible tight supplies caused by tensions over Iran, analysts said.

Brent North Sea crude for delivery in October gained 69 cents to $114.39 a barrel in London midday deals.

New York’s main contract, light sweet crude for September stood at $96.54 a barrel, up 57 cents after briefly striking a fresh 3.5-month high at $96.76.

“Markets have shown increasing nervousness over current and possible disruptions to supply, amid rising geopolitical tensions in the Middle East,” said Leo Drollas of the London-based Centre for Global Energy Studies.

The center’s chief economist added that “hopes of a better economic outlook in the second half of the year may also be pushing markets upwards.”

Israeli saber-rattling about an imminent unilateral strike being prepared by the country against nuclear sites in major oil producer Iran has put markets on edge.

Israel, like its close ally the United States, accuses Iran of seeking to develop an atomic arsenal.

Tehran insists its nuclear program is exclusively peaceful, while its military chiefs warn that they will destroy Israel if it attacks.

Traders were also following developments in the eurozone, where Germany and the European Central Bank slapped down a Der Spiegel report that the ECB plans to limit the borrowing costs of debt-wracked eurozone countries.